IT industry watches Iowa

Democratic presidential candidates have remained relatively quiet on technology, but as primary season gets under way, the "offshoring" controversy could provide a catalyst to raise the profile of high-tech concerns in the campaign.

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What's new:
The race for the Democratic presidential nomination gets under way in Iowa and New Hampshire.

Bottom line:
The movement of U.S. tech jobs overseas could provide a catalyst to higher-octane discussions of high-tech concerns in the Democratic presidential primaries.

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The flow of U.S. manufacturing jobs overseas has been a recurring theme of the Democratic debates leading up to Monday's Iowa caucuses and next week's New Hampshire primary, in a jab at President George W. Bush. As a result, lobbyists are closely tracking the positions of Democratic candidates on offshoring, which many companies argue is necessary to preserve their competitiveness.

"One of the concerns I have is what happens in this situation when, in their eagerness to create a policy issue, some of them have engaged in a lot of antitrade rhetoric and antiglobalization rhetoric," said Harris Miller, president of the Information Technology Association of America (ITAA). "From the association's perspective, it will be an ongoing concern if it turns into a hard-and-fast policy concern in the general election."

Offshoring offers among the biggest technology interests in a campaign where neither Democrats nor Republicans have weighed in on hot-button technology topics such as spam, computer security, Internet taxes and online piracy.

Along with Reps. Richard Gephardt, D-Mo., and Dennis Kucinich, D-Ohio, Massachusetts Sen. John Kerry has positioned himself against the technology industry on offshoring.

"In the U.S. alone, the value of IT services provided by offshore labor will double to $16 billion next year and triple again to $46 billion by 2007," Kerry's campaign Web site states. The site indicates that if elected, Kerry would try to slow the practice. Kerry also introduced legislation in November that would require employees of offshore call centers to identify their location.

ITAA's Miller, who says he has helped to raise money for candidate Howard Dean in a personal capacity, says IT companies would "be very disappointed in any presidential candidate who has made a fundamental of his campaign that he would remove the U.S. from a leadership role on trade issues...obviously this is a lot of posturing in the primary. We know that candidates in both parties have last-minute changes of heart when they have to go out in front of the general electorate."

Applause from industry
Probably the candidate with the most extensive record on technology is Connecticut Sen. Joseph Lieberman, who has been active in Congress in areas as diverse as privacy, free trade and video games. That should be no surprise. Lieberman, who is polling in the single digits in Iowa and New Hampshire, is likely the Democrat with the least regulatory views on taxes and trade--crucial concerns to any industry with a global focus.

"Clearly Lieberman has the most articulated and defined positions and record in support of technology," said Dave McCurdy, president of the Electronic Industries Alliance, an umbrella organization of technology trade associations that comprises about 2,300 member companies. "Without question, he's more pro-high-tech even than the Bush administration."

Last May, Lieberman won the endorsement of technology executives and venture capitalists, including John Doerr of Kleiner Perkins Caufield & Byers, and Handspring CEO Donna Dubinsky. Other Lieberman endorsers were Henry Samueli, chairman and chief technology officer of Broadcom; Dan Scheinman, a vice president of Cisco Systems; and John Freidenrich of the Bay Partners venture capital firm. Lieberman has received a "life rating" of 100 percent from the Information Technology Industry Council, which compiles lists of technology votes in Congress, with an emphasis on trade.

Before the 2000 election, Lieberman sided with the tech industry on key issues: lifting the cap on H-1B visas, renewing the moratorium on Internet taxes, extending the research and development tax credit, and promoting antispam legislation, among others. But on social issues, Lieberman has often drawn fire from civil liberties and First Amendment groups for his dogged campaigns against Internet prurience and video game violence. He has condemned video game makers for excessive violence, saying last year that the PlayStation 2 game "Grand Theft Auto III" was "sick and indefensible." He's also pressured companies such as Best Buy, Circuit City and Wal-Mart Stores to stop selling violent games to minors.

Another issue, Lieberman has advocated an ".xxx" or ".sex" top-level domain for pornographic content on the Internet. "This idea, which would in effect establish a virtual red-light district...has a lot of merit, for rather than constricting the Net's open architecture, it would capitalize on it to effectively shield children from pornography, and it would do so without encroaching on the rights of adults to have access to protected speech," Lieberman told a government commission in June 2000.

Both the Lieberman and Dean campaigns were caught spamming last year, something that is not restricted by the recently enacted Can-Spam (Controlling the Assault of Non-Solicited Pornography and Marketing) law.

McCurdy of the Electronic Industries Alliance also had kind things to say about Sen. John Kerry of Massachusetts, who is tied with Dean in New Hampshire or leading by a hair, according to polls. "Kerry has made an effort to reach out to the technology community and is actually pretty knowledgeable on a number of the issues, though not always lining up (with us)," McCurdy said. "(Sen. John) Edwards a little less so, and Gephardt is not even in the ballpark because of his position on trade and outsourcing."

By the numbers
In a rarity among the candidates, former Vermont Gov. Dean has produced an Internet policy paper, "Principles for an Internet Policy," which outlines some themes familiar to frequent Net users; It calls, for instance, for the Internet's end-to-end nature to be protected. But it also reiterates pro-regulatory themes, calling for more federal spending to achieve "universal Internet access, regardless of economic or geographic position," for example.

Dean's campaign has relied heavily on the Internet for fundraising and organizing, which has produced a surprisingly strong showing for a Washington outsider from a state with just three Electoral College votes. Though Dean had staked out an early lead, he finished third in the Iowa caucuses, well behind first-place finisher Kerry and the runner-up, North Carolina Sen. John Edwards.

Former Army Gen. Wesley Clark, who, according to an American Research Group poll is gaining ground in the days leading up to the New Hampshire primary, does not list any technology topic on his campaign Web site. Instead, the site is devoted to touting Clark's proposed tax hikes, foreign-policy advice, and prescription drug benefits.

Clark did receive more than $830,000 for his lobbying work on behalf of data-mining firm Acxiom, according to the Center for Public Integrity. Acxiom is the same company involved in a secret deal last year to use information on JetBlue Airways customers to create passenger profiles. Until last fall, Clark was on the board of Acxiom and Entrust, a Dallas-based company that sells security and digital identity products.

Kucinich warns of how the USA Patriot Act made it easier for police to wiretap the Internet, and notes that he was the only candidate to vote against the law. Kucinich also alleged last November that Diebold, which makes touch-screen voting machines, had unreasonably invoked the Digital Millennium Copyright Act to silence critics on the Internet.

Chris Hoofnagle, associate director of the Electronic Privacy Information Center, said Edwards has one of the best privacy records of the Democratic candidates, whose number also includes the Rev. Al Sharpton.

"Sen. Edwards has twice introduced a spyware bill. It's very strong," Hoofnagle said. "It's an opt-in bill...The 'adware' companies of the world, like Gator, are always trying to seek exemptions from being defined as spyware. Sen. Edwards' bill didn't make compromises."

Introduced in January 2001, Edwards' Spyware Control and Privacy Protection Act would have required computer users to give their consent before software "that includes a capability to collect information about the user" could be activated. It died in committee.

Overall, however, political experts said technology will not play a central role in the presidential election season.

"It's safe to say that almost none of the really important Internet and technology issues will be debated during this campaign," said Adam Thierer, a policy analyst at the nonpartisan Cato Institute. "In an attempt to shore up votes and campaign cash for the technology community, all the candidates will probably just play it safe and stick to bland platitudes and generalities about how 'technology is vital to the U.S. economy.' It's just a bunch of hot air."

Thierer predicts that in the weeks leading up to the November general election, Bush will do the same. "The Bush campaign will be feeding us the exact same rhetoric and telling us he's the man that really cares about high-technology and the Internet in America," Thierer said. "But there has been no coherent vision or policy leadership on these issues from the Bush White House."